Payments: Contracts And Cases

Key Problems Faced with Payment Clauses in Construction Contracts:

1. Lack of contractual hygiene – often there is a lack of clarity about the deal entered into. Sometimes parties start out with a Memorandum of Understanding or a Letter of Intent, but never actually manage to enter into a formal contract, because they can’t agree the final terms. There is also the problem of incorporating correspondence to reflect the negotiations, rather than including this within the terms themselves.
2. Attribution of last-minute discounts  – we see many cases where the price has been agreed between the contractor and employer and everything is ready to go, then at the last minute the employer thinks they can push a bit further, and asks for another 5% discount or £5million off the price!